The major U.S. indexes moved largely lower over the past week, as a better-than-expected manufacturing report early in the week was offset by lower-than-expected employment data. Non-farm payrolls rose just 98,000 in March – compared to a consensus of 175,000 – although investors were comforted by a sharp 0.2% drop in the unemployment rate and strong job gains in the manufacturing sector that drives middle-class spending. Of course, the Syrian air strike has also weighed on the market as concerns mount over Trump’s long-term plans.
International markets were mixed over the past week. Japan’s Nikkei 225 fell 1.3%; Germany’s DAX 30 fell 0.71%; and, Britain’s FTSE 100 rose 0.31%. In Europe, the Eurozone reported its best period of economic activity since the 2011 sovereign debt crisis with HIS Markit’s survey reaching a six-year high. In Asia, investors will be anxiously watching President Trump’s meeting with Chinese President Xi Jinping that began on Thursday in Mar-a-Lago where the two are likely to discuss trade policy and North Korea.
The S&P 500 SPDR (ARCA: SPY) fell 0.23% over the past week. After moving off of its 52-week high, the index has been hovering around its pivot point at $135.54. Investors should watch for a rebound toward R1 resistance at $239.48 or a breakdown from its 50-day moving average at $233.82 to S2 support at $227.87. Looking at technical indicators, the RSI recovered but remains neutral at 51.17, while the MACD remains in a bearish downtrend that dates back to early March — although it could see a bullish crossover in the near-term.
The Dow Jones Industrial Average SPDR (ARCA: DIA) rose 0.02% over the past week, making it the best-performing major index. After moving off its 52-week high, the index has traded in a narrow range just below its pivot point at $207.11. Traders should watch for a rebound to R1 resistance at $210.41 or a breakdown below its 50-day moving average at $205.46 to S2 support at $199.74. Looking at technical indicators, the RSI appears neutral at 49.22 while the MACD remains in a bearish downtrend that could soon reverse.
The PowerShares QQQ Trust (NASDAQ: QQQ) fell 0.31% over the past week. After briefly touching trend line and R1 resistance at $133.61, the index has traded sideways just above its pivot point at $131.51. Traders should watch for a breakout to R2 resistance at $134.85 or a move below trend line support to S1 support or its 50-day moving average at $129.64. Looking at technical indicators, the RSI appears a bit lofty at 59.79 while the MACD remains in bearish territory but could see a bullish crossover.
The iShares Russell 2000 Index ETF (ARCA: IWM) fell 1.42% over the past week, making it the worst-performing major index. After briefly rising above its pivot point, the index moved lower to nearby its lower trend line support. Traders should watch for a breakout toward the upper end of its price channel at $142.00 or a breakdown lower to S2 support at $128.72. Looking at technical indicators, the RSI appears neutral at 47.68 while the MACD remains depressed, but could see a bullish crossover in the near-term.
The Bottom Line
The major U.S. indexes moved largely lower over the past week with the exception of the Dow Jones Industrial Average that posted a modest gain. Most indexes have neutral technical indicator readings, which provides few hints as to future price movements. Next week, traders will be several economic indicators including Janet Yellen’s speaking engagement on April 10, consumer sentiment on April 13, and retail sales data on April 14. Investors will also be closely monitoring the situation in Syria for signs of escalation.
Note: Charts courtesy of StockCharts.com. As of the time of writing, the author had no holdings in the securities mentioned.